This paper investigates the causes underlying the tragic story of Korea’s bicycleindustry from what appeared to be as competitive as Taiwan’s up until the 1970s to itscomplete dissolution and collapse. Whereas Taiwan went on to overtake Japan as theworld’s number one bicycle exporter by 1980, Korea’s bicycle industry peaked in thelate 1980s without ever reaching its maturity both in terms of export and productionperformances and then hopelessly declined to fall apart by the late 1990s. This paperexamines three key causal factors: Samchuly-Kia’s monopolistic complacency; Korea’sindustrial structure and the assembler-supplier relations; and the state’s unbalanced andbig chaebol-biased industrial policies. In so doing, it contributes to rethinking andredefining the role of government and industrial policy in managing so-called sunsetindustries.